Tags: carl icahn | rail | sumitomo | american

Icahn to Sell Rail Lessor to Sumitomo in $2.8 Billion Deal

Icahn to Sell Rail Lessor to Sumitomo in $2.8 Billion Deal

(AP)

Monday, 19 December 2016 02:29 PM

Icahn Enterprises, the investment firm controlled by billionaire Carl Icahn, agreed to sell American Railcar Leasing to Sumitomo Mitsui Banking Corp. in a deal that values the business at $2.78 billion including debt.

The cash transaction involves 29,000 rail cars and is expected to close in the second quarter of 2017, Icahn Enterprises said in a statement Monday. For three years after that, Icahn will have an option to sell Sumitomo another 4,800 rail cars for about $586 million.

A boom of tankcar manufacturing and leasing went bust after oil prices tumbled from more than $100 a barrel in 2014. Major U.S. railroads have cut investment this year as freight carloads for large carriers dropped 5.8 percent this year through the first week of December, led down by a 21 percent drop in coal and a 22 percent plunge in petroleum products. Icahn Enterprises also controls American Railcar Industries Inc., which makes and services railroad cars.

The deal with Sumitomo boosted railcar stocks. FreightCar America Inc., a Chicago-based manufacturer, rose 3.4 percent to $15.47 at 1:55 p.m. in New York, while Greenbrier Cos. climbed 2.6 percent to $42.95. American Railcar Industries, which is 61 percent owned by Icahn and separate from the leasing company the billionaire is selling, advanced 5.4 percent to $47.82 after surging as much as 13 percent.

Icahn Enterprises fell 3.6 percent to $59.02. The company is a master-limited partnership that holds stakes in the billionaire activist’s investments in industries including autos, energy, metals, rail cars, casinos, food packaging, real estate and home fashion.

The sale of the railcar leasing business is subject to customary closing conditions, Icahn Enterprises said. Deutsche Bank AG served as financial adviser to American Railcar Leasing while Thompson Hine acted as legal counsel.

 

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Icahn Enterprises, the investment firm controlled by billionaire Carl Icahn, agreed to sell American Railcar Leasing to Sumitomo Mitsui Banking Corp. in a deal that values the business at $2.78 billion including debt.
carl icahn, rail, sumitomo, american
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2016-29-19
Monday, 19 December 2016 02:29 PM
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